Gold prices stayed above $2,100 on Wednesday, near a record high set the day before, as traders awaited Federal Reserve Chair Jerome Powell's economic outlook comments.
Gold held steady at $2,127.39 per ounce at 0829 GMT. U.S. gold futures declined 0.3% to $2,135.30. Last week's weak U.S. economic data left little room for a June rate decrease, triggering gold's sentiment-driven advance, said Ajay Kedia, director of Kedia Commodities, Mumbai.
Gold might experience profit taking without dollar movement or geopolitical issues, he warned. Spot gold's 14-day relative strength index reached 78, far above 'overbought' 70.
"Extremely light positioning across listed financial gold products (futures/options, ETFs) and robust physical demand (EM CBs, bar/coin), suggest there is plenty of dry powder to test higher nominal prices in 2024," a note from Citi said.
For clarification on U.S. economic risks in a high-interest rate environment, traders will watch Powell's first day of semi-annual congressional testimony. U.S. labor market data due this week will also be examined. A bearish surprise might boost gold.
Traders expect a 25-basis-point June Fed rate drop at 57%. Lower rates make non-yielding bullion appealing.
The central banks have bought over 1,000 tons of gold in the last two years, compared to the historic average of 300 tons. "Kunal Shah, head of research, Nirmal Bang Commodities, Mumbai, said this offset the retail and ETF demand loss.
Silver declined 0.1% to $23.70, platinum 0.7% to $886.30, and palladium 1.3% to $960.65.
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